Mortgage rates see biggest daily increase since June 2023: Moneyfacts

The average mortgage rate increased from 5.07% last Thursday (12th March) to 5.18% on Friday, according to the latest Moneyfacts data.

This is the biggest daily jump in prices since June 2023, the figures show, as lenders adjust to higher swap rates sparked by the Iran war. 

The average two-year fix across all LTVs is now 5.18%, up from 4.86% a month ago on 13th February, while the average five-year fix has increased from 4.97% last month to 5.24%.

In addition, Moneyfacts data shows a significant drop in the average shelf-life of a mortgage, amid market uncertainty.

Last month saw a significant fall in the average shelf-life of a mortgage to 14 days, recorded on the first of March. In a turn-around from the seasonal slowdown during January, the market is now entering a period of uncertainty amid global pressures. 

The last time the shelf-life was as short was at the start of August 2023, at 13 days, a month prior it was just 12 days, a record low (shelf-life captured since 2011). As a comparison, the average shelf-life was 15 days at the start of October 2022, when the ‘mini-Budget’ had an unprecedented impact on mortgage choice.

Overall product choice dipped month-on-month, but remained above 7,000 options. Lenders may well pull more products until the future path of interest rates becomes clearer, but choice typically bounces back after short-term unrest.

Rachel Springall, finance expert at Moneyfacts, said: “Borrowers looking to refinance would be wise to act quickly to secure a new deal, as the significant push in mortgage activity during February has led to a significant fall in the average shelf-life of a mortgage to just 14 days. This is a complete contrast to the notable seasonal slowdown in activity during January. However, since this data was captured, there has been a notable shift in swap rates, amid the unrest seen in the Middle East. It is worth noting that the average shelf-life of a mortgage has not been this low (14 days) for over two years, last lower for August 2023, at 13 days. This was just one month after a record low of 12 days recorded for July 2023.

“The general optimism heading into 2026 for the market might have suffered a bit of a setback, as it is looking incredibly unlikely that the Monetary Policy Committee will favour a cut to the Bank of England Base Rate (BBR). The reason rests on the uncertainty surrounding tensions in the Middle East; this puts pressure on inflation, gilts and as a casualty, swap rates – the latter drives the cost of fixed rate mortgages. A hold to the BBR should not delay borrowers from refinancing, as they can still save a significant sum by moving off a standard variable rate (SVR). 

"The outlook might look a bit bleak for borrowers right now, but as we have experienced before, a short-term spike in market volatility can heal and interest rates are still far lower than they were a couple of years ago. The overall choice in deals is also significantly higher, particularly those aimed at borrowers with small deposits.”